Pakistan export volumes fall but earnings rise

Export volumes from Pakistan's cement industry in the first four months (July-October 2022) of FY22-23 fell but export prices rose, leading to higher export earnings, according to the country's Federal Bureau of Statistics (FBS). Prices increased to US$50.40/t from US$36.70/t over the period.

As a result, exports grew by 1.25 per cent in terms of value, despite volumes being down by 26.61 per cent. During the 4MFY22-23, the industry earned US$66.270m by exporting 1.324Mt of cement and clinker, compared with US$65.451m from 1.804Mt of exports in the 4MFY21-22. In local currency terms, export sales ballooned by 36.74 per cent YoY to PKR14.90bn, according to FBS.

Experts believe that the massive decline in coal prices could be one reason for the higher export prices. However, AKD Research believes that, with the global economy heading towards a slowdown as major central banks hike interest rates, the quantum of world trade is likely to slow significantly. Global commodity prices are also expected to ease greatly, which bodes well for Pakistan. Conversely, the country’s exports will also contract as the country’s largest export-oriented industries (textile and others) struggle with the unavailability of gas. 

In October 2022 alone, export revenues dropped to US$19.01m on shipments of 328,581t versus US$29.13m and 612,404t in September 2022. This translates to a MoM decline of 31.65 and 37.53 per cent in value and volume terms, respectively. On an annual comparative basis, exports grew by 94.32 per cent in terms of value and by 53.75 per cent in terms of quantity when considering October 2021's export figures of US$16.24m on shipments of 248,833t.

Production in 3MFY22-23
The overall output of the Large Scale Manufacturing Industries Index (LSMI) decreased by 0.4 per cent in July-September 2022-23 compared to July-September 2021-22. Experts blamed floods and the high cost of doing business for slowing down the LSMI. The impact was also felt on local cement production which slid by 20.4 per cent YoY to 9.125Mt from 11.468Mt in the year-ago period. The trend was also noticed in September 2022, when production dipped by 1.5 per cent to 3.955Mt versus 4.014Mt in the same month last year.